Experimental evidence indicates that cannabis or ?9-tetrahydrocannabinol (THC) use precipitates psychotic symptoms and is associated with a greater risk to develop schizophrenia and worsen its outcome. These observations led to the formulation of the cannabinoid hypothesis of schizophrenia, which postulates that over-activity of the brain endocannabinoid system may contribute to the etiology of this pathology. Recent studies, however, have challenged this hypothesis: for example, drugs aimed at blocking cannabinoid CB1 receptor activity have failed as antipsychotics in clinical trials. Paradoxically, the endocannabinoid anandamide has been found elevated in the cerebrospinal fluid of drug-nave schizophrenics and negatively correlated with the severity of psychotic symptoms, suggesting that endocannabinoids may have a protective role in schizophrenia. In keeping with this hypothesis, our preliminary experiments carried out in phencyclidine (PCP)-treated rats, an animal model of schizophrenia, showed that systemic administration of URB597 (a drug that elevates brain anandamide by inhibiting its inactivation) reverses PCP-induced behavioral deficits and increases coordinated neuronal activity in the prefrontal cortex (PFC), which is deficient in schizophrenia. The divergent effects of THC versus endocannabinoid-enhancing drugs may be attributable to their distinct properties (i.e., brain-wise versus localized activation of CB1 receptors, respectively). In addition, anandamide has the ability to activate other non-CB1 targets. In this proposal we will use behavioral, electrophysiological and biochemical approaches to test the hypothesis that elevation of endocannabinoid tone alleviates PCP-induced behavioral deficits that model schizophrenic symptoms. We will also investigate whether CB1 receptors are necessary and/or sufficient for the expression of the antipsychotic action of anandamide. There are three specific aims. In AIM 1, we will assess how THC and endocannabinoid-enhancing drugs affect behaviors relevant to schizophrenia (working memory, social interaction and motor activity) in PCP-treated and normal rats, and analyze their underlying pharmacological mechanisms. In AIM 2, we will study the effects of these drugs on the activity of coordinated neuronal ensembles and single neuron activity in the PFC of saline- and PCP-treated rats using in vivo electrophysiology. In AIM 3, we will investigate the effects of the above drugs in the same experimental groups on: (1) endocannabinoid levels, (2) expression and function of CB1 and non-CB1 endocannabinoid-sensitive receptors, and 3) expression and function of endocannabinoid inactivating enzymes, in brain areas relevant to schizophrenia. This study will allow reformulating the cannabinoid hypothesis of schizophrenia to take into account the protective role of endocannabinoids in this disorder, and provide a rationale to design more effective pharmacotherapies for the treatment of psychoses.